The economic recovery is spreading into the regions, says British Land

The UK is seeing signs of an improving economy which has led to a wave of kitchen manufacturers, homeware retailers and fashion houses snapping up British Land premises across the country, according to chief executive Chris Grigg.

In its interim management statement, Britain's second-biggest property company reported a pick up in London office space, with retailers across the country clambering to open new stores.

"We have had a good third quarter and the business is performing well. Overall, the UK property market had a strong quarter with London strengthening further and domestic and international investment spreading out into the regional markets," said Mr Grigg.

He continued that footfall was flat, an improvment on this time last year the real estate investment trust saw a 3pc drop in visitors. He put this down to an improvement in the credit quality of businesses looking for space.

Consumers tart up their homes and wardrobe

"Over the last few years our leasing guys have been approached by stores such as Poundland, of which we need to be careful as their presence can cause tension between footfall and other operators," Mr Grigg explained. "We are now seeing interest from homeware, kitchen manufacturers and fashion houses."

"This pretty typical of the current thinking of most of the reits, capitalise on rising investor interest in the regions by selling some mature assets, but still stay cautious on speculative development by focusing on London," said Mat Oakley, director of commercial property at Savills. "I'd expect to see more interest in regional office development this year, as the supply demand balance is even more attractive than in London."

Dividend is up

In the three months to the end of December, like-for-like occupancy rose 0.3 percentage points to 97.1pc and the company let or renewed 386,000 sq ft of retail space.

Sales totalling £405m included the Eastgate shopping centre in Basildon, Essex, which went for £89m.

The third interim dividend payment for the quarter ending 31 December 2013 will be 6.75p per share, a 2.3pc increase on the same period last year.

The company also said it had let the 30th floor of the Leadenhall Building, popularly known as the Cheesegrater, to upmarket serviced office business Servcorp. The deal is the first single-floor letting in the City block, of which it owns a half share.

British Land also announced it was switching its auditor from Deloitte to PricewaterhouseCoopers (PwC). The property firm is the latest in a line of big companies ringing the changes ahead of EU regulation that will see require large corporates to rotate their auditor to open up competition in the accountancy industry.

Investor groups had criticised the company's relationship with Deloitte because of the large amount of lucrative consulting work the firm did for British Land, creating a potential conflict of interest.

British Land shares were up 5pc to 667p on yesterday's close of 662p.